Nuclear Power: Do you support it?

[mswiggs]

Re: Nuclear Power, Do you support it?

On the topic of Radiation,
Recently I saw a documentary on Radiation, where it appears a certain amount of radiation is beneficial for the prevention of cancer.
They found in a community which was exposed to fallout caused by the Chernobyl incident and had higher than normal background radiation, that genes which are associated with cancer "prevention" were being expressed (utilised by the body) at a higher rate than those from areas of normal background radiation.

Also the documentary noted that a flock of sheep which was exposed to fallout from Chernobyl had to be slaughtered as the authorities felt that they were a health hazard. This was despite that fact that someone would have to eat a serving of "chops" from these sheep for a year to be exposed to half the radiation from a dental x-ray.

 

[Dukey]

Re: Nuclear Power, Do you support it?

Have just been catching up on this thread... very interesting reading.
... As for me... I think the best solutions to our energy problems would be the cleanest / safest / cheapest solutions - and for me that means Nuclear is out for the time being.

I like Smurf's suggestion to push geothermal , & Solar-thermal sounds interesting as well.

Questions for Smurf - or anyone else for that matter
(....sorry Smurf to put the load on your back mate - but your posts are very informative, and you obviously know the subject backwards!!)

1. Is it feasible (or useful) to incorporate Geo & Solar thermal in the one plant??? Would it improve efficiency or reliability of supply? (I know nothing about the structure of such plants).

2. Re Nuclear - whats your take on the 'fusion reactors' in China (posted below)- is it for real or just a propaganda exercise?? How close is this technology to actual implementation??

3. Would also be interested in your views regarding issues around nuclear waste.

-Dukey

 

[2020hindsight]

Re: Nuclear Power, Do you support it?

Re Nuclear - whats your take on the 'fusion reactors' in China

hell I just voted for the Fishin party - I thought they were for alternative nuclear power !! turns out all they know about is flatheads and mackerels and stuff.!! (I wish they had spellcheck at electoral offices)
( http://en.wikipedia.org/wiki/Fission )

 

[Smurf1976]

Re: Nuclear Power, Do you support it?

Questions for Smurf

1. The short answer is no. I'll explain how it works...

A geothermal plant is basically the same as a coal-fired plant (or nuclear or older technology oil or gas-fired plants) but with a different source of heat.

In a coal (or nuclear etc) plant what you have is a heat engine to turn an alternator. That's it. The engine being a steam turbine.

All the coal, nuclear etc is used for is to produce the steam. A nuclear reaction heats water, so does burning coal or oil. Once you're past the point of producing the steam it's the exact same process whether it's a brand new nuclear plant or a 1950's coal-fired plant.

Look at a power station and you're basically looking at a giant boiler. All the big physical parts are associated with steam production. The stacks, cooling towers, conveyor belts, mines, water supply etc. It's all just to produce steam.

So all a geothermal plant really is, is a coal-fired plant with a different means of producing the steam. And that's the really good point about it.

We can build large, controllable steam turbine plants that run 24/7. Due to scale, they are quite economic (scale is critical to this - a small coal-fired plant, and 100MW would be small, is generally uneconomic unless you're using zero cost coal mine waste to run it).

So as long as we can get steam from geothermal sources at a reasonable cost and in a reliable manner then we know that we can generate reliable and reasonably cheap electricity using it. No question beyond the point of actually getting the steam from the ground.

In places like New Zealand they have been using geothermal electricity since the 1950's. The steam flows naturally from the ground so it was no big deal to just run that through a turbine and generate electricity.

In Australia, we have the heat underground but not the water so we don't have steam flowing naturally. But, in theory at least, we ought to be able to put water down and get steam back up. It's just using the hot rock to provide the heat instead of coal or nuclear.

We could generate virtually all of our baseload (24/7) electricity this way. That's 80% of total power consumption. From a technical perspective it could go over 90% but the economics of building capital intensive geothermal plants for use only when demand is high would likely be poor just as they are for coal-fired plant used in that application (though it was done historically in the absence of an alternative).

Obviously getting the water is an issue since we're talking about power stations located in the middle of a desert. But if we're going to build a major national power system then it's really just a case of adding a pipeline from northern Australia in as part of the overall project. We're talking about tens of billions of $ anyway so a pipeline isn't likely to blow out the costs too much.

The other issue is transmission. With coal near the major cities we don't lose that much energy in transmission. It's only a few % lost (contrary to popular belief). Those losses will be larger for the longer distances associated with geothermal.

Losses in this context are an economic issue rather than a major technical or environmental problem. It's like sunlight. Nobody cares about the actual efficiency of using solar since there is plenty of sunlight. Efficiency only matters to the point that higher efficiency reduces the cost. This is very different to, say, coal where losses mean waste of a limited resource and the associated pollution due to having to use more of it.

This is basically the same for geothermal - losses are an economic cost but if that's the only way of using geothermal energy (which it is) then it simply becomes part of the overall cost of production. We shouldn't dismiss geothermal on the grounds of, say, 20% transmission losses just because we can do coal or nuclear with lower losses since the geothermal resource itself is so much more abundant and relatively non-polluting that a bit less efficiency isn't going to matter beyond the economic issues.

Solar thermal.

These plants are basically a hydro-electric scheme turned upside down and using hot air rather than falling water.

In a hydro scheme you have a catchment and storage at the top, penstocks (pipelines) down the hill and turbines at the bottom. Those turbines turn an alternator just like in a coal or nuclear plant - it's only the means of getting the mechanical power to turn the alternator that is different.

A key benefit of hydro is flexibility. With nothing to heat up, it can be turned on and off quite easily. Hydro can run flat out in the afternoon and completely shut down overnight and can change output very quickly if, for example, a coal-fired plant breaks down. That flexibility is one key advantage of hydro compared to fossil fuel or nuclear.

That you have a storage of energy (water) is the other major advantage compared to, say, wind. No significant rain for months but we can still run both the Snowy and Tasmanian systems flat out when power demand is high. Obviously it needs to rain sometime, but it doesn't need to coincide with the need for power.

But hydro is limited in a country without too much rain or good dam sites (though we do have substantial undeveloped hydro potential).

So how about turning the whole thing upside down? Use the sun rather than the rain, put the storage at the bottom rather than the top, use air rather than water as the working fluid and have it rise rather than fall. But still use turbines turning alternators to produce the actual electricity.

In a physical sense this means building a giant greenhouse. That's the catchment (solar collector) and also a storage of hot air. Then build a fairly conventional "chimney" stack. Hot air rises just as water falls and the further it rises the more energy it can produce. This rush of rising hot air can then turn the turbines (located on the ground at the inlet to the stack) in essentially the same manner as water spins the hydro turbines.

And with the storage capabiltiy it will still produce some power in the middle of the night. The storage is nowhere as large as many hydro schemes so it can't produce constant power but there is storage nonetheless. So it would be possible to ensure maximum production during hot Summer afternoons or around 6pm in Winter when demand peaks. This is a massive advantage compared to wind - you never know when it's going to blow. That it works in Winter when demand peaks (noting that it is dark at that time) is a major advantage over solar panels or other solar systems without storage.

From an efficiency perspective there isn't much to gain by combining geothermal and solar thermal in the same plant. Sure, solar thermal using steam is quite possible but it is the hot air system that seems to have the cost advantage.

So the way to do it would be to have geothermal providing the baseload. This is 80% of total power generation. Then use the available hydro for peak loads (realisically 5 - 10% depending on whether or not any additional dams are built) and use solar thermal for the intermediate loads to make up the balance.

In a technical sense it could work just as well as present power sources. Economics is the question but geothermal and solar thermal do seem to have advantages over other non-fossil fuel options both with cost and through not requiring major backup (fossil fuel) facilities since they produce power in a consistent, predictable manner.

2. Fusion.

I'll believe it when I see it as far as commercial power generation is concerned. I'm no expert on the specifics of fusion technology but it's had more false starts and claims of success than practically anything else.

Doing it in a lab or in an experimental plant without regard to cost or actually generating real power is one thing. Nobody's going to worry about how much power you're taking FROM the grid to make it work or how many $ you're spending if the purpose is to prove that you can make fusion happen.

But real power station needs to be producing more power than it consumes and doing so at a reasonable cost. There's just no point in generating electricity at, say, 10 times the present cost since we wouldn't be using too much of it at that price. And if we're not going to use much of it then we don't actually need fusion power.

It's just like we wouldn't use much petrol it if cost $50 a litre. And if we used so little of it then we wouldn't be worried about future supply since the oil reserves would be adequate for thousands of years to come. It is only the scale of consumption that creates the problem.

So either it's cheap or there's no point in having it beyond that required for essential uses such as refrigeration, communications systems, lighting etc.

It's a national or global version of the Tasmanian experinece of the 1980's and 90's. When the cheap power sources (the Franklin dam - 60% the size of the Snowy had it been built) were ruled off-limits by the Commonwealth the result was simply an end to significant power demand growth and with it the end of population and economic growth. That happened virtually overnight and persisted until another reasonably cheap power source (importing first gas then coal-fired power from Victoria) was found. And now demand's up 35% in a decade and the economy has grown once again.

So it's not a question of energy per se. It needs to be reasonably cheap or there's no point in producing it. Tasmania had plenty of physical electricity supply from oil during the 80's and 90's but it was expensive and thus sat largely idle.

I strongly suspect fusion will have much the same problem - too expensive to be useful except for essential uses (not industry etc) in places with no alternative. Just like oil-fired power is today.

To be continued...

 

[Dukey]

Re: Nuclear Power, Do you support it?

Thanks Smurf - great detailed answers and explanations as usual...
I reckon you should write a book on this stuff!!

Seem like there is no need for nuclear here in Oz. Geo thermal certainly sounds like the winning technology to me.

I wonder then if Johnny's push for nuclear simply is a case of wanting the $$$ from U mining. ...
I mean If we approve use of Nuclear energy here in Oz - then we as a nation can hardly take any kind of anti-nuclear, anti Uranium high ground. - Hence, soon enough, U mining will be open season and of course the economic benefits will be enormous. (And Johnny can say... 'I did that!!').
Basically - once it's done - it's done and the Nuclear issue will be relegated to history.
except that... probably before long - every nation on earth will be armed to the teeth with diabolical weapons, just waiting for the next crackpot leader to takeover and use them at will.

Or am I just paranoid...I mean... the quality of so called 'world leaders' today makes us all feel safe right.....

-dukey

 

[Mofra]

Re: Nuclear Power, Do you support it?

To be continued...

I hope so, found that post extremely interesting.

 

[Smurf1976]

Re: Nuclear Power, Do you support it?

Continued...

3. Nuclear waste.

It's pretty easy to store whilst the power station is still in operation. You just literally store it in a building on site in the same manner as chemicals, tools, spare parts or anything else would be stored. It's little different to a farmer having a shed full of fertilizer and another one where the tractors etc are stored when not in use. Easy...

HOWEVER, the big problem comes when the power station eventually closes. They don't last forever - 60 years is pretty much the limit and in practice it's usually less than that. Same with coal-fired plants and indeed all non-hydro power stations - if your first job upon leaving school is building it then odds are you'll still be around when it closes.

All of the Australian capital cities have disused coal or oil-fired power station sites, many of them within walking distance from or even within the city centre. Go to those places today and they are either derelict and literally abandoned, are empty shells used for theatres, restaurants or offices or have been flattened completely and put to some other use. And yet most of these plants were still running until at least the late 1970's, some until the late 80's.

It's the same story with the earlier non-city plants too - either demolished or likely to be soon.

If these had been nuclear plants then we'd have had to do something with the waste once the plant closed. That's when the real trouble starts.

We haven't had any real success with keeping ANYTHING industrial intact for long once it ceased to be used productively unless we turned it into a museum open to the public. Other than that, even where we have consciously tried, the best that has generally been achieved is to slow the rate of decay where the facility is not actually in ongoing use. And if you just completely walk away and come back 40 years later then it's usually just about fallen down (literally) at the hands of nature. Man isn't very good at building anything that doesn't require ongoing maintenance and there's a limit to how many nuclear power museums we're going to want.

So I'm not at all confident that humans would actually safely maintain a nuclear waste store for 10,000+ years. Indeed a point could well arrive during that time when we are not ABLE to maintain it safely.

So the only sensible option IMO is to either not produce it in the first place, make it safe to abandon or put it somewhere that doesn't require ongoing human involvement to keep it safe. That basically leaves underground in the middle of nowhere as the only realistic long term disposal site if we're going to be creating hazardous nuclear waste that needs long term storage.

........................................................................................................

Off the topic of those questions, a few things have been happening lately in the Australian energy business that will influence the decision to build any nuclear plant here.

1. A 400 MW high tech coal-fired plant has been announced for Victoria. Backed with Commonwealth funding, it is expected to commence operations in 2009 (though I wouldn't be surprised if it were later since that's a rather short construction time). The plant will be built by an Australian company with Chinese financial backing.

2. The Hydro-Electric Corporation (Hydro Tasmania) has announced its intention to exit fossil fuel generation altogether (apart from small diesel plants on the Bass Strait islands). It proposes to sell 100% owned subsidiary company Bell Bay Power to Alinta thus ending its almost 40 year largely unprofitable involvement with oil and more recently gas-fired generation, something it has attempted by various means on several occasions since the second oil shock in 1979. Its last use of oil was in 2003 whilst gas-fired operations will cease in 2009 if the deal goes ahead.

Alinta plans to use the 3 existing open cycle gas turbines (total 105MW) purchsed from Hydro as part of it's peaking plant (see below) whilst the main part of Bell Bay power station, the steam turbines (total 240MW), is likely to be scrapped.

3. Alinta has announced plans to build a high efficinecy 200MW combined cycle gas turbine plant plus 180 MW of open cycle (peaking) gas turbines in Tasmania. Plans for both are well advanced noting that Alinta already owns the Vic-Tas gas pipeline which runs well below capacity thus giving Alinta effectively zero gas transmission cost. Alinta has negotiated a 15 year gas supply contract associated with this power station development. The new power station will use around one third less fuel per unit of electricity produced compared to the existing steam turbines at Bell Bay power station.

4. It has been announced that the leaders of Russia, Iran, Qatar, Algeria and Venezuela will meet on April 9th to form a "natural gas OPEC''. This cartel will control approximately 70% of the world's natural gas reserves.

5. Another Hydro subsidiary, Roaring 40's, has announced the construction of an additional 3 wind farms in China valued at AUD240 million, doubling the company's presence in China and bringing the company's number of wind farms to 8 (one in Tasmania, one in South Australia, six in China).

...

So we've got the first actual "clean coal" plant about to be built, Hydro's running away from gas, Alinta's locking in a fixed price for 15 years and increasing the efficiency of its use whilst moves are afoot to form a gas cartel. China's involved with clean coal in Victoria and Hydro's building wind power in China.

Spot the consistent themes here? It all points towards those investing the $ wanting to be either less exposed to gas prices or out of that business altogether and developing alternatives whilst those holding the gas reserves are forming a cartel.

As for nuclear, Alinta's plant adds to the list of power stations with fuel supply contracts or physical mines ending in the middle of the 2020's whilst the new clean coal plant aims to prove that technology as an alternative.

The electricity issue for SE Australia will come to the crunch at that point in the 2020's. Gas seems likely to be more expensive in real terms by then so it's either cleaner coal, nuclear or renewables that get built to replace Yallourn, Hazelwood and Morwell (Vic, coal-fired) and the reduced production from gas-fired plants as they presumably shift from base to peak or intermediate load production. Given the construction lead time, that gives us no more than a decade to decide on a nuclear plant if that's to be the long term solution. If we haven't committed to it by then, we'll be building something else instead or literally sitting in the dark.

We will, of course, need new capacity for increasing demand before that time so the nuclear issue could well come earlier. But the withdrawal of over 3000MW of basload generation, literally half the baseload generation in Victoria, most certainly brings it to a head. If it doesn't happen then, it probably never will.

 

[Smurf1976]

Re: Nuclear Power, Do you support it?

I wonder then if Johnny's push for nuclear simply is a case of wanting the $$$ from U mining. ...
I mean If we approve use of Nuclear energy here in Oz - then we as a nation can hardly take any kind of anti-nuclear, anti Uranium high ground. - Hence, soon enough, U mining will be open season and of course the economic benefits will be enormous. (And Johnny can say... 'I did that!!').
Basically - once it's done - it's done and the Nuclear issue will be relegated to history.

It's got a lot of "now or never" about it. If the nuclear industry can't get an Australian nuclear power station built at a time of mass public concern over climate change, a need for new generating capacity across several states and a Liberal government then odds are they never will.

It's a bit like not being able to sell ice creams when it's 45 degrees. If you cant sell them at that time then you might as well give up on ever selling them. Now is the best opportunity the nuclear industry's likely to get short of an actual climate catastrophy or the earth opening up and swallowing all the coal.

Leave it another decade and the geothermal industry will likely have an operational plant and know exactly what its costs are. So too the solar thermal industry will likely prove (or otherwise) its potential by then. And we're all but certain to have a cleaner brown coal plant up and running well before then.

All it takes is one federal Labor government and you can be pretty certain it will happen. For that matter, the states are very seriously considering mandating the use of renewable energy if Johnny does remain in office so it will probably happen anyway.

So a decade from now the nuclear industry potentially has a lot more competition than it does today. Whereas 10 years ago most weren't too worried about coal. Hence the window of opportunity the nuclear industry sees.

 

[AnalysisParalysis]

Re: Nuclear Power, Do you support it?

This may cause intelligent people's blood to boil, but couldn't nuclear waste be launched into space. There's plenty of it.

 

[Smurf1976]

Re: Nuclear Power, Do you support it?

This may cause intelligent people's blood to boil, but couldn't nuclear waste be launched into space. There's plenty of it.

That idea was around in the 1980's and was a popular current affairs question asked / answered by celebrities etc at the time.

Interviewer: "What should we do with nuclear waste"?

Actress / model: "I think blasting it into space would be a good idea".

Only problem I can see is if something goes wrong with the launch and we end up scattering the stuff over a very wide area. Fine if all goes well but an outright disaster if it doesn't - much like nuclear power itself.

 

[macca]

Re: Nuclear Power, Do you support it?

I am a bit concerned as to where we are going to be in 50 - 100 years.

I do think that either hot rocks or nuclear will be our next major supplier of electical power.

Hot rocks tech is still very new and has a lot of work to do, Nuclear is also a viable option IMO.

I think that as our space flights improve or semi space flight happen, with ultra high reusable space /aircraft type craft , sending the scrap into space will be a lot more plausible.

A cargo plane that shoots a canister of waste into space and returns to earth is really all that is needed.

We are going to run out of oil, gas and coal one day, eventually it MUST happen, we should be prepared.

 

[BIG BWACULL]

Re: Nuclear Power, Do you support it?

I think that as our space flights improve or semi space flight happen, with ultra high reusable space /aircraft type craft , sending the scrap into space will be a lot more plausible.

A cargo plane that shoots a canister of waste into space and returns to earth is really all that is needed.

We are going to run out of oil, gas and coal one day, eventually it MUST happen, we should be prepared.

Its that sort of attitude thats puts us in the position were in now, sweep it under the carpet and let someone else clean it up when it becomes unmanageable or a problem. Shoot all our junk into space and maybe when Haileys comet passes by again it will be a radioactive tip. More research needs to be conducted on what can be done to neutralise toxic waste otherwise there are more alternatives out there that are viable. If there are other lifeforms out there do you think they want our rubbish?
O.K here is a scenario Your neighbours bin is full the tip is full, is it alright if he dumps his rubbish behind your garden shed where you cant see it or maybe at night he jumps your fence digs a hole, fills it with rubbish and covers it up without a trace, or he could research and look back through his rubbish find out why he has so much and recycle where he can. My biggest qualm is what do we do with all the toxic waste from reactors.

 

[value investor]

Re: Nuclear Power, Do you support it?

I believe that a better way to start to solve the problem is energy efficiency. I know that efficient light globes will hardly put off the need for more power plants, however there are other items that can make a huge difference. I previously had a normal electric hot water system that was getting old so I decided to replace it. I looked at solar as it provides around 70% reduction in energy. But they are ugly. I then by chance found a system called solar heat pump that works like youre fridge only in reverse and for water not air ( therefore it works night/day, summer/winter, clear or cloudy). I have had this system installed now for 4 months and have been monitoring my electricity usage. Before we averaged a total household useage of 18kwh per day. Now we are averaging 11.2kwh per day simply by changing our hot water system. Just think if the government gave enough of a rebate to encourage people( they do offer a rebate but not enough to sway most people as normal systems are way cheaper in the first place, not the long run) we could probably reduce our electricity needs by at least 1/3. These systems can also be used in industry. The company I used is called quantum energy. They have a really good website (quantumenergy.com).

 

[happyjack]

Re: Nuclear Power, Do you support it?

Mostly when they are talking about nuclear power they are talking Sydney\Melbourne and houses would get built up to the power station fence more viable options would be Darwin, at the old the old Rum Jungle Uranium mine, and Mount Isa/Cloncurry the old Mary K uranium mine, both areas have enough "power usage" to warrant a nuke site and both have HUGE lakes for water supply cooling towers etc to dispose of waste just drill 500ft 6 inch holes drop a 20 ft 5 inch pipe with the waste in it and cement it down there, True I have no idea how much waste a nuke plant produces but I am sure it is not that much

It is not a matter of if you support it or not we are running out of alternatives eventually it will definitely get used, the only variable is WHEN

Happyjack :horse:

 

[Smurf1976]

Re: Nuclear Power, Do you support it?

Mostly when they are talking about nuclear power they are talking Sydney\Melbourne and houses would get built up to the power station fence more viable options would be Darwin, at the old the old Rum Jungle Uranium mine, and Mount Isa/Cloncurry the old Mary K uranium mine, both areas have enough "power usage" to warrant a nuke site and both have HUGE lakes for water supply cooling towers etc to dispose of waste just drill 500ft 6 inch holes drop a 20 ft 5 inch pipe with the waste in it and cement it down there, True I have no idea how much waste a nuke plant produces but I am sure it is not that much

It is not a matter of if you support it or not we are running out of alternatives eventually it will definitely get used, the only variable is WHEN

Happyjack :horse:

You're going to need some serious new industry in Darwin and Mt Isa to make it work there. You wouldn't get a single modern reactor up to full output even supplying both at once. And a grid relying on a single unit is guaranteed to be unreliable.

Every other state has individual power stations that are larger than either of these two grids. Nothing wrong with that, Darwin just doesn't need that much power. It's not as though they're running smelters or have freezing weather up there. But small scale makes it a dud location for a nuclear plant.

 

[Miner]

Re: Nuclear Power, Do you support it?

An extract on Uranium shares - probably fits in this forum to correlate shares vs this debate.
Extract from Eureka Report

Energy hunger will lift uranium
By Tim Treadgold


PORTFOLIO POINT: Increasing energy demand, particularly from China, will push up uranium prices. It’s time to reconsider a handful of stocks.


Apart from investing in fringe financiers there was one other way to lose money very quickly last year: uranium exploration stocks. It will take a long time for second-tier finance companies to recover, but there are already signs that uranium is the resource category most likely to fire in 2008.

The prices of the “energy resources” coal and oil offer a clue as to why uranium will stage a comeback. Both are at near-record levels as buyers scramble for supplies. Last week, without anyone seeming to notice, most of Australia’s specialist coal stocks hit 12-month share price highs.

A second clue is evidence of investment fund activity, such as that of the Canadian-based Uranium Participation Corporation (UPC), which last month waded into the market with an order to buy 900,000 pounds of uranium because it believes the price is “at, or near, the bottom”. And that's from James Anderson, chief financial officer of UPC, which is already sitting on a stockpile of 4.5 million pounds of uranium managed by a major uranium producer, Denison Mines.

Not everyone agrees. In the uranium market there are still as many bears as there are bulls. Deutsche Bank is one of the bears, last week talking down an immediate uranium revival – though even a report from such a well-regarded investment house contained the seeds of optimism.

Deutsche Bank says it will not be “until the final quarter of 2008” that the spot uranium price climbs back over $US100 a pound.

While pessimists seized on that forecast as evidence of a delayed comeback for uranium, optimists might as easily have pointed out that the $US100 price tip represents a 37% increase on the current spot market price of $US73 – and any commodity looking at a possible price rise of more than a third in less than nine months cannot be ignored.

That’s why it’s time to dust of your uranium files and start sifting through the 250 listed stocks, discarding about 240 of them as the boom-time rubbish they always were, and focus on the handful of companies with quality assets, in jurisdictions that actually allow uranium mining.

In Australia, that means looking at companies active in the Northern Territory or South Australia, or those with exposure to stable overseas countries such as the US, Canada, or a few southern African states such as Namibia, Malawi, or Zambia.

Do that, and you finish up with a list headed by:

Energy Resources of Australia, the local market leader set to benefit from an extended life at its Ranger mine in the NT and the higher uranium price.

Paladin Resources, which is steadily increasing production at its Langer Heinrich mine in Namibia and building a second mine in Malawi.

Equinox Minerals, which has started with copper production at its Lumwana mine in Zambia and is moving on to a separate uranium pit at the same location.

Extract Resources, a longer shot but a company that has reported a string of excellent exploration hits in Namibia, including the latest adjacent to Rio Tinto’s big Rossing mine.

Those four stocks cover the different segments of the market. ERA is a world-class producer; Paladin an emerging producer; Equinox a quality company with a proven uranium resource in the ground; and Extract is a pure explorer, but one with a better chance of delivering than most of its competitors.



Sifting out the few quality uranium stocks from the over-supply of chancers is not easy, but is more important than this time last year when the faintest click of a scintillometer (Geiger Counter) sent a stock into orbit. It is highly unlikely that those conditions of rampant, mindless, speculation will return.

The next phase of the uranium story will see a clear line drawn between companies with some hope of survival, discovery and development, and the rest of the pack. Many of the smaller explorers are likely to abandon the uranium search in search of easier targets.

The principal problem with uranium last year was that it rocketed up too far, too fast – driven largely by inflated estimates of future demand, and a shortfall in supply because of flooding at big mines in Canada and Australia. Those physical factors, combined with debt-fuelled hedge fund buying pushed the uranium price to a peak of $US137 a pound.

By the middle of last year it was obvious that a lot of the trading in the physical uranium market, and in uranium companies, was debt-driven. When the credit crunch hit the US there was an exodus from both markets with the result that the uranium price collapsed and speculative stocks collapsed even more sharply.

From its peak of $US137 a pound of uranium has fallen by 46.7%. Explorers that were once highly rated have fallen much further. Toro Energy, which is closely associated with Oxiana Resources, has fallen 84% from a peak price last year of $1.36 to recent trades around 21.5 ¢. Marathon is down 77% from a peak of $6.68 to $1.51, and Deep Yellow is down 65% from 71 ¢ to 25 ¢.

The four stocks suggested as worth including in a second-generation uranium portfolio have held up better. ERA has fallen 27.8% from its peak of $27.35 to $19.70. Paladin has dropped by 54% from $10.80 to $4.90. Equinox has benefited from its copper operations to slide 26.6% lower from $7.05 to $5.17, and Extract has done very well as a pure explorer, falling 28.4% from $1.48 to $1.06.

The questions every investor should be asking are: (a) is the worst over? and (b) is uranium a serious investment class given its track record of 30 years in the doldrums and one summer of irrational exuberance?
The answer to (a) is that the jury remains out. Natural enthusiasts such as Charlie Aitken can see the bottom. Others can’t. But, what can safely be said about the next 12 months on the market is that it will be better than the past 12 for the simple reason that it is hard to imagine it being any worse.

Accept that the green shoots of an overall recovery are starting to sprout as the worst excesses of the boom are transferred into the hands of insolvency practitioners and then consider the case for uranium. This is strong ground because much of the action in the next phase of the resources market will be energy-related. Quite simply, China wants it, and it is prepared to pay.



Oil has been the star in the energy sector, and will continue to shine as the reality of “peak oil” becomes obvious to the few remaining bears who believe that the oil price will somehow decline significantly. To do that a series of major new oilfields must be found, or thirsty countries such as the US and China must cut demand.

Coal is a more accurate proxy for uranium because both have electricity production as their major uses. That’s why last week’s action among coal stocks was a useful pointer to a recovery in the uranium market.

Macarthur Coal reached a record $13.79 last week, compared with a 12-month low of $4.65. Gloucester Coal hit a peak of $9.79, up from a low of $3.63, and Felix Resources sold as high as $12.71 compared with a low of $4.52.

Prices for those coal stocks have slipped back this week, but the message from last week’s trading was crystal clear: global demand for all forms of energy is high, and rising, and uranium is a critical part of future energy supply, which is why countries such as the US and Britain are reviving their nuclear power plans.

If there is a major difference between coal and uranium it lies in the fact that the world is already hooked on coal, despite the protests of the environmental movement. Coal-fired power stations are much easier to build than nuclear reactors, and there is a much deeper market for coal, which is also easier to transport.

But, over time, uranium will claw its way back into a market dominated by coal. The worldwide push to cut carbon emissions is a prime factor underpinning the revival of interest in nuclear power, which has seen a sharp increase in the number of planned reactors.

Resource Capital Research estimates that over the past 12 months 93 new reactors have been added to the worldwide inventory of planned and proposed nuclear power plants. There are now 315 reactors in the planning stage, compared with 222 a year ago, and just 153 reactors being planned 18 months ago.

If all the planned reactors are built it will represent an effective doubling in uranium demand, given that most of the next-generation reactors are substantially bigger.

As with all resource-linked investment concepts, the country likely to do most for uranium demand (and price) is China. It currently has 11 active reactors, and 116 in planned and/or proposed. category.

This time around the uranium market will be different to the 2007 boom. It is unlikely that there will be a burst of speculative hype. It is more likely that the market will rise steadily with quality stocks leading the way.

 

[fiftyeight]

Pretty much what I have been arguing to my friends and family, although a lot more eloquently

http://www.watoday.com.au/comment/j...-toll-none-dead-none-sick-20130604-2nomz.html

 

[Smurf1976]

But how much public money has been poured into dealing with the problems in Japan?

If TEPCO shareholders had to foot the entire bill, including paying hourly wages to displaced persons until such time as they can safely return home, then that would see the end of commercial nuclear power in an instant.

Why use a technology that costs a fortune? Why not pump the same public subsidies into large scale integrated wind, solar and hydro which can provide firm, dispatchable power with higher reliability than nuclear?

 

[qldfrog]

as well as the usual scary radiation, etc effect, the fact is I have not yet been convinced that any reactor is economically viable:
fuel not that abondant (as per oil) so what will be done once the easy picks are taken,and the fuel price rises?
and even with cheap/free uranium, the cutting into small pieces and store into molden glass of the millions of tonnes of a nuclear plant is never ever factored in the equation;
Has anyone heard of a single nuclear plant being decomissionned AND cleaned up?
From what I know, the lifetime get extended until the plant basically collapse and then is stopped..and left as is with vague promises

it is usually running like that:
a private business get the initial investment, the running cost/profit (and there isprofit at this stage)and the state has to end up cleaning the mess after;
Most of nuclear plants were built as an excuse to get fuel for the bomb:
USSR, USA, FRANCE, UK, and the electricity was just a way to sell the lot to the public.
The economics do not stack up, but I would not mind going for nuclear plant not based on uranium but on thorium.
This got stopped in the US when the bomb was required.
India is maybe working on this again if I remember well

 

[CanOz]

But how much public money has been poured into dealing with the problems in Japan?

If TEPCO shareholders had to foot the entire bill, including paying hourly wages to displaced persons until such time as they can safely return home, then that would see the end of commercial nuclear power in an instant.

Why use a technology that costs a fortune? Why not pump the same public subsidies into large scale integrated wind, solar and hydro which can provide firm, dispatchable power with higher reliability than nuclear?

Nuclear energy is extortionately expensive, especially if you include the cleanup cost in the, what seems to be, inevitable accident....or two. They just refurbished the Point LePreau Nuclear Facility in my home province at a cost of $2.3 Billion....

My question is though Smurf, what would that equivalent get you in alternative energy in MW?

I agree that in concept it sounds like the right thing to do.

CanOz